Summary:
U.S. stocks rose on Monday on expectations corporate earnings will exceed forecasts, but global shares and the dollar traded little changed after data showed the Chinese economy grew slower than anticipated.
U.S. stocks rose on Monday on expectations corporate earnings will exceed forecasts, but global shares and the dollar traded little changed after data showed the Chinese economy grew slower than anticipated.
Second-quarter earnings are expected to decline 8.1%, according to Refinitiv data, down further than the 5.7% decline expected at the start of the month. S&P 500 index is trading at a relatively high 19.7 times forward earnings.
Gold prices were little changed, with bullion traders still doubtful about whether the Fed may soon signal an end to its monetary tightening path. Oil dropped by more than 1% after the weaker than expected Chinese economic growth.
Commodities
U.S. shale oil production is projected to fall to nearly 9.40 million bpd in August, which would be the first monthly decline since December 2022, data from the EIA showed.
Still, global supplies could see a boost from the resumption of output at two of three Libyan fields that were shut last week. Output had been halted by a protest against the abduction of a former finance minister.
Forex
The dollar dipped on after last week suffering its largest weekly decline this year as Treasury yields tumbled, but held above more than one-year lows reached on Friday with no major catalysts to drive market direction.
U.S. Treasury yields fell sharply last week as slowing consumer and producer price inflation in June increased expectations that prices pressures will continue to moderate, and in turn lead to more dovish monetary policy.
The German Bundesbank said that the euro zone's largest economy may shrink this year by more than the 0.3% decline expected only a few weeks ago, despite a small bounce in the second quarter.
Yen weakens ahead of Japan's election as political risks, trade tensions, and fiscal concerns drive USD/JPY near the 148 level.
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Trump's One Big Beautiful Bill Act brings permanent tax cuts, spending shifts, and a projected $3.4T rise in US deficit over 10 years.
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The euro hit a 3-week low Monday, and the Mexican peso weakened as Trump threatened 30% tariffs on EU and Mexico imports starting in August.
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